Currencies remain locked in some consolidation, with the latest USD rally stalling out by some familiar shorter-term range extremes. The Euro failed to break below 1.3165 on Thursday, and we have since seen some fresh buying on the dip below 1.3200. Offers however have emerged above 1.3300 following a Moody’s downgrade of Ireland to Baa1 with a negative outlook. Risk sentiment has held up quite well despite, and global equities and commodities continue to be bought on dips for now. The EU Summit is underway and the leaders have agreed to the creation of a permanent fund for future crises that will take effect in 2013. Germany’s Merkel managed to negotiate more attractive terms for her country with the EU treaty changes stating that the crisis mechanism could only be activated if “indispensible” to safeguard the stability of the Euro as a whole.

UK consumer confidence came out a good deal weaker than expected and has prevented the Pound from additional gains on Friday, as the currency continues to underperform. The US House has gathered enough votes to pass the Bush era tax cut Bill, which will attempt to help stimulate the economy. Eur/Chf and Gbp/Chf trade by record lows, with SNB warnings post rate decision of potential intervention falling on deaf ears as past official actions have failed to depreciate the Franc, leaving the central bank in a tough spot. Aud/Nzd has been surging and trades by decade highs, while Usd/Jpy remains locked in a tight consolidation below 84.50, and Usd/Cad remains well bid on dips to parity. Germany’s IFO survey is the only key release in European trade on Friday, while the calendar is also anemic in North America with US leading indicators (1.1% expected) as the sole data release.